Good afternoon. My name is Angie and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Manhattan Associates Q4 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer period. As a reminder, ladies and gentlemen, this call is being recorded today, Tuesday, February 1, 2022. I would now like to introduce Dennis Story, CFO of Manhattan Associates. Mr. Story, you may begin your conference.

Thank you, Angie. And good afternoon, everyone. Welcome to Manhattan Associates 2021 Fourth Quarter Earnings Call. I will review our cautionary language and then turn the call over to Eddie Capel, our CEO. During this call, including the question-and-answer session, we may make forward-looking statements regarding future events or the future financial performance of Manhattan Associates. You are cautioned that these forward-looking statements involve risk and uncertainties, are not guarantees of future performance, and that actual results may differ materially from the projections contained in our forward-looking statements. I refer you to the reports Manhattan Associates files with the SEC for important factors that could cause actual results to differ materially from those in our projections, particularly on our annual report on Form 10-K for fiscal year 2020 and the risk factor discussion in that report as well as any risk factor updates we've provided in our subsequent Form 10-Qs. We note in particular that uncertainty regarding the impact of the COVID-19 pandemic on our performance could cause actual results to differ materially from our projections. We are under no obligation to update these statements. In addition, our comments include certain non-GAAP financial measures in an effort to provide additional information to investors. We have reconciled all non-GAAP measures to the related GAAP measures in accordance with SEC rules. You'll find reconciliation schedules in the Form 8-K we submitted to the SEC earlier today and on our website at manh.com. Now I'll turn the call over to Eddie.

Thanks, Dennis. Good afternoon, everyone. And thank you for joining us as we review our fourth quarter and full year 2021 results, as well as our outlook for 2022. Well, 2021 was a very successful year for Manhattan Associates, setting all-time records in total revenue, RPO, cash flow, and earnings per share. In February 2018, we announced our goal to become a Cloud-first company within five years. And four years into this transition, we've exceeded our own expectations and are well ahead of our initial timing and economic projections with Cloud solutions representing 90% of our pipeline opportunities. And despite the pandemic and in the midst of this Cloud transition, we delivered record revenue in two of the four years and are guiding towards a third in 2022. Proudly, our associates continue to execute extremely well, serving both customers and our end markets. Demand for our unified commerce and supply chain Cloud solutions is very strong, creating great visibility for us as we enter 2022. And to help drive growth and serve our customers, we plan to add about 500 net new employees globally, and we remain committed to significantly investing in innovation to meet the future needs of our customers, grow our market share, and extend our addressable market. And while global ebbs and flows certainly persist, we remain very encouraged by our near-term and long-term growth opportunities. So pivoting to results. Q4 was a record quarter that, again, exceeded our expectations. Total revenue increased 17% to $171 million, and adjusted earnings per diluted share of $0.48 was up 7% as we invested significantly in employee compensation. Regarding RPO, the leading indicator of our growth, in Q4 we added a record $126 million of RPO bookings, setting new highs in Americas, in EMEA, and in APAC. Our global sales team continued to execute well on robust demand for exciting offerings across products, industry verticals, and geographic locations. Demand also remains solid from both new and existing customers with 20% of 2021 contracted bookings coming from net new customers. In the quarter, our win rates continued to be very strong at 75% as our innovation is recognized as differentiating and industry-leading. And from a vertical perspective, retail, manufacturing, and wholesale drove more than 80% of our bookings in the quarter. And drilling into the sub-verticals, they're pretty diverse, and they include apparel, department stores, grocery, consumer goods, industrial, transportation, as well as durable and non-durable goods. On the professional services front, our global team continues to set the bar for the industry. Our cloud portfolio implementations have gone very well in 2021, as our industry-leading team successfully conducted over 100 go-lives just in Q4 alone. In line with our outlook and prior commentary, we remain focused on adding and retaining our exceptional talent in 2022. And speaking of 2022, our pipelines are strong with net new potential customers representing about 35% of demand, and I mentioned earlier, we're increasing our investment in research and development to nearly $100 million this year. Now let me provide a few additional details on our product portfolio. I'll start off by providing another positive update on the progress we're making with Manhattan Active Warehouse Management, the industry's first and only true cloud-native WMS serving the tier-one market. In May 2020, we announced Manhattan Active WM as the natural successor to our industry-leading on-premise warehouse management for open systems solution. So we've been in market for about 20 months with Manhattan Active WM, and we continue to see strong market demand and great enthusiasm. Customer deployments have been very successful and we now have nearly 60 customers who are committed to deploying Manhattan Active WM around the world. And while Manhattan WMS has been known historically for the way it excels in large-scale complex direct-to-consumer and retail distribution centers, our initial Manhattan Active WM deployments have really been highly diverse. Today, Manhattan Active WM subscribers are located in 12 different countries and represent 21 distinct industry sub-verticals, and this diversity in that customer base really reinforces our belief that supply chains of all kinds are looking to embrace cloud-native, always current, fully extensible technology for their distribution centers, regardless of their industry. And recent events have certainly shown us the critical importance of technology that allows businesses to respond quickly and effectively to supply chain disruptions. Because of the cloud-native nature of Manhattan Active WM, we empower our customers to deploy new sites, new capabilities, new users, very swiftly. And that close relationship with Google Cloud allows us to deploy our Manhattan Active WM nearly anywhere, anytime with high levels of reliability and extremely low levels of latency. The robustness of the underlying Active platform is best-in-class user experience and functional capability, and the strength of our team on the ground are combining to produce exceptional customer outcomes. So now I'll provide you with just a quick update on Manhattan Active Transportation Management. As you recall, our customers can deploy Manhattan Active Transportation alongside Manhattan Active Warehouse Management to form Manhattan Active Supply Chain, the industry's first and only cloud-native fully unified supply chain execution platform. And since its launch in May 2021, Manhattan Active Transportation Management has enjoyed outstanding market interest and uptake with strong international traction as well. In fact, half of our initial Manhattan Active Transportation subscribers are outside of North America, and our EMEA and Latin America teams are doing very well with Manhattan Active TM thus far actually where the product's very first go-live was in Brazil. And we've communicated in the past, building a global customer base for our TMS application has been one of our strategic goals, and the hard work of our international TMS teams is really starting to pay off. And we're encouraged that the results of Manhattan Active Transportation Management show that our supply chain unification message is really resonating in the market. Almost half of our Manhattan Active Transportation Management customers are also Manhattan Active WM customers. And our teams are reporting that customers are placing a really high value on our ability to offer a single user interface to manage all aspects of supply chain execution, to orchestrate end-to-end processes, both across WMS and TMS, and keep all of their supply chain applications fully integrated and current. And finally on the product front, maybe a quick update on our omnichannel commerce solution, Manhattan Active Omni, including our point-of-sale application. Our point-of-sale project teams remain busy with a number of new deployments in real life. And throughout the year, we're slated to light up a large number of additional stores running our point-of-sale application. And many of those customers also run enterprise order management, and similar to the benefit I mentioned earlier, many of our Manhattan Active Omni customers see the advantage of a unified solution across both the digital and bricks-and-mortar channels. In this quarter, we'll kick off our first Manhattan Active Allocation project with one of our strategic customers in EMEA. Manhattan Active Allocation is a next-generation inventory optimization solution designed for fashion retailers. It's built on our industry-leading Manhattan Active architecture, and we believe that it brings a fresh approach to a software category that's been mired in decades of old technology. And just this past quarter, we released an exciting new capability within Manhattan Active Omni, our interactive inventory capability. It's getting a powerful boost from an all-new machine learning capability that really further optimizes order promising. Many of our Manhattan Active Omni customers are shipping orders from hundreds of stores each in addition to their distribution centers. And this new solution analyzes multiple static and dynamic market factors to make a much more accurate shipping and delivery prediction in real-time as customers are shopping and checking out. The initial results we're seeing indicate over a 50% reduction in late delivery thanks to this sophisticated machine learning algorithm. And for our Manhattan Active Omni customers, it's really another great example of the advantage of an ever-evolving operational platform with new game-changing capabilities like this one being delivered to them on a very regular basis. And we continue to be really excited about our long-term growth potential. Secular tailwinds are numerous and the benefits of resilient modern supply chains are pretty clear. Now, why are we confident that Manhattan Associates is well-positioned to gain market share and outgrow the market in 2022 and beyond? Well, we're the industry leader and our technology is world-class. The competitive environment is favorable and our win rates are strengthening. The pipelines for our market-leading solutions continue to progress very well. Our cross-sell opportunity is large and growing, in fact, we've dedicated more resources to cross-selling in 2022 and see the opportunity to expand this over time as well. Finally, we have a significant pipeline of existing on-premise customers who want to shift to our cloud-native applications that are scalable, visionless, and extensible. So that concludes my business update. Dennis is going to provide you with an update on our financial performance and discuss our outlook for 2022 and beyond. And then I'll close our prepared remarks with a brief summary before moving to Q&A.

Thanks, Eddie. Our Manhattan global teams continue to execute at a high level as Eddie highlighted. In 2021, we set all-time records in RPO, total revenue, cash flow, and earnings per share; hats off to our global associates for the outstanding performance. I'll start with recapping our financial performance for the quarter and year. All growth rates are year-over-year unless otherwise stated. Q4 total revenue was $171 million, up 17%. Full-year revenue totaled $664 million, up 13%. Excluding license and maintenance revenue, which removes the revenue compression by our Cloud transition, Q4 revenue growth was 24% and the full year was 20%. Q4 Cloud revenue totaled $35 million, up 51%, with full-year revenue totaling $122 million, up 53%. We closed out 2021 with RPO of $699 million, growing at 126% and up 22% sequentially, as demand continues to be robust. Our global services team delivered Q4 revenue of $82 million, up 15%, and on the year, $335 million, up 10%. Importantly, cloud sales continue to fuel services growth globally. Our Q4 operating profit totaled $39 million with an adjusted operating margin of 22.8%. Our full year operating margin was 26.8%, up 160 basis points over 2020. Factoring in Q4 retail peak seasonality, we exceeded margin expectations. As discussed in our Q3 call, we also invested an additional $10 million in performance-based compensation and employee retention investments. Our Q4 earnings per share of $0.48 exceeded our prior guidance with full-year totaling $2.23 on 27% growth. Q4 operating cash flow was $40 million and our full-year operating cash flow increased 31% to $185 million, generating a 27% free cash flow margin and a 28% EBITDA margin. We ended the year with $264 million in cash and zero debt. For the year, we invested $100 million in share buybacks, including $20 million in Q4, and last week, our board approved replenishing our repurchase authority to $50 million. Moving to guidance. As consistently mentioned, our overarching financial objective is to deliver sustainable double-digit top-line growth and top-quartile operating margins benchmarked against enterprise SaaS comps. With increased visibility, we are conservatively raising the midpoint of the preliminary 2022 revenue, operating margin, and EPS guidance that we provided last quarter. We are also reiterating our 2022 RPO guidepost midpoint of $1 billion and all our guideposts for 2023 and 2024. Our cloud revenue and RPO guideposts from 2021 to 2024 can be found in today's earnings release supplemental schedules. So for full-year 2022, we expect total revenue of $700 million to $715 million, with a $708 million midpoint, up from our previous midpoint estimate of $705 million. Excluding license and maintenance attrition, this represents 16% growth, and all-in our target is 7%. The first-half, second-half total revenue splits are 49% and 51% respectively. For Q1, we expect total revenue of $168 million to $170 million. Our full-year adjusted EPS range is $1.98 to $2.10. The $2.04 midpoint is up from our previous $2 estimate. For GAAP EPS, our guidance range is $1.31 to $1.43. For Q1, we expect adjusted EPS of $0.44 to $0.46, and GAAP EPS of $0.33 to $0.35. For Q2 through Q4, we expect GAAP EPS to be about $0.19 lower than adjusted EPS quarterly, which accounts for our investment in equity-based compensation. For full year 2022, we are increasing our cloud revenue range to $161 million to $167 million, representing 34% growth. At the midpoint for Q1, we estimate Cloud revenue will be roughly $36.5 million and that it will increase to $39 million in Q2, $42 million in Q3, and $46.5 million in Q4. For services revenue, we are increasing our revenue forecast to $365 million to $373 million, representing 10% growth at the midpoint. On a quarterly basis, we expect Q1 services revenue of roughly $86 million at the midpoint, and $94.5 million in Q2, $98 million in Q3, and accounting for retail peak seasonality $90.5 million in Q4. For maintenance, we are refining our revenue range lower to $135 million to $138 million as more customers convert to the cloud. For Q1, we anticipate maintenance revenue of about $35.5 million at the midpoint and $34 million in Q2. For Q3 and Q4, we expect approximately $33.5 million of maintenance revenue per quarter. With license revenue trading in favor of Cloud, we expect $13 million to $15 million for the full year, representing approximately 2% of total 2022 revenue. For Q1, we expect roughly $5 million of license revenue and $3 million in Q2, Q3, and Q4 respectively. For hardware, we anticipate $6 million in revenue per quarter and for consolidated subscription maintenance and services margin, we are targeting about 53.7%. Q1 will be about 52.7%, Q2 and Q3 is expected to increase to between 54% and 54.5%, while accounting for seasonality, Q4 is expected to be about 53.5%. Our 2022 adjusted operating margin range will be 23% to 24% with a midpoint of 23.5%, up from our prior midpoint of 23.25%. Our full-year operating margin objectives incorporates three significant variables as we anticipate the following. First, license and maintenance attrition of 300 basis points on customer demand for cloud; second, the investment for talent hiring and retention including wage increases; and third, additional investment in our business including the return of pandemic-impacted expenses. For Q1, we expect operating margin of approximately 21.7% and for sequential improvement of about 175 basis points in both Q2 and Q3. Accounting for seasonality, we expect Q4 operating margin to be approximately 23.5%, and, beginning in 2023, we continue to target 75 to 125 basis points of operating margin expansion going forward. Finally, we expect our tax rate to be 21.5% and diluted share count to be approximately 64.5 million shares, which assumes no buyback activity. So that covers a fantastic financial update. Thank you very much, and back to Eddie for some closing remarks.

Terrific. Thanks, Dennis. Well, as you can tell, we're very pleased with the strong fourth-quarter and record-setting 2021 results. Well, there certainly is some turbulence in the global macro environment, but we're entering 2022 very well-positioned. Our business momentum is strong, and we continue to deliver market-leading innovation that drives our customers' digital transformation. And as a result, we anticipate long-term, sustainable, and profitable growth for Manhattan Associates. To wrap up, I want to thank all of our employees globally for a fantastic year in 2021. Your relentless dedication and commitment to our customers is one of Manhattan's key differentiators. So thank you. Thank all of you. And Angie, we're now ready to take questions.

Your first question comes from the line of Terry Tillman with Truist Securities. Please state your question.

Thank you and congratulations on the RPO and the fourth-quarter record. Hi, Eddie, Dennis, and Mike. Also, Dennis, thank you for the detailed guidance every quarter; it makes modeling quite straightforward. My first question is for you, Eddie. Regarding the unified technology stack, how often are discussions in the pipeline involving customers interested in purchasing both the WMS and TMS? Does this present an opportunity for vendor consolidation? Thank you.

Well, certainly vendor consolidation is no question about that, Terry, and that's our objective. In terms of buying both together, certainly those conversations are happening. Certainly the conversations about the roadmap of, frankly, which system to implement first and so forth are happening. Honestly, the answer to the question really comes down to the capacity of the customers' organization to be able to implement both solutions simultaneously, because that is quite a plateful, so we work with them to figure out which one first, which one second, which piece is first, which piece is second, to deliver the best results for them, but it's a pretty exciting time for us and for the market for sure.

And it's a nice cross-sell, up-sell opportunity, Terry.

Sure. Thanks. Eddie made a good point about having great visibility. Dennis, considering Eddie's comment on this visibility, how do you view RPO activity throughout the year? With over 60 customers and increasing go-lives, we're noticing a positive ripple effect from the installed base becoming more at ease. They are indicating readiness, which is crucial for strengthening our visibility in the market. Additionally, I wanted to discuss the seasonality of RPO.

Was there a question there, Terry? What I'd tell you is absolutely, visibility is fantastic, forward-looking, we're doing quite well there. And I think that's represented really in the guidepost that we've put out and reaffirmed.

Okay. This will definitely be a question. On seasonality, how do we think about RPO, because you have been at it for a while now. And so, are you seeing any market changes in seasonality and how we should be thinking and forecasting RPO across the quarters? Thank you.

I think demand blew through seasonality in Q4, so we'll update you next Q4 as well.

There is generally no significant difference in buying patterns between the cloud sector and the licensed sector. While there isn't a lot of seasonality, we do notice slightly increased purchasing towards the end of Q4 and into Q1 as customers prepare for implementations before the busy season the following year. It's not very substantial, but if there is any seasonality, that's how it manifests.

And it tends to impact services more than it does the cloud sales.

To wrap up the commentary, Eddie, the reality is that there may be some positive fluctuations in Q4. Additionally, we might observe some early activity in the year as customers have their budgets ready and need to initiate projects before the holiday season.

That's right. Again, it's not a huge swing but we see a little bit of that. And then, of course, you tend to see a little bit of a slowdown in the summer. That's more probably more in Europe than here. And a little bit of a slowdown going into peak while IT organizations and so forth are focused on getting ready and are a little distracted from the buying process. But I'll reiterate no major swings here, but those are the cycles.

Nice job, guys. Thanks.

Thank you, Terry.

Hello?

Brian, your line is open. Please state your questions.

Hello, sorry guys the mute button got me. Well, congrats on the RPO numbers, those are fantastic. But just following up on Terry's question on the RPO. I'm curious, are your customers willing to commit to more products now that you have a broader cloud portfolio? We were talking about seasonality, but I'm curious, are people willing to buy more products at the same time now, just given that they're more integrated? I'd be curious to get your thoughts on that, Eddie.

Again, it's really the same answer, Brian. There is great opportunity for cross-sell and up-sell obviously because of the integrated and unified nature. About 15% of the 2021 bookings were kind of that cross-sell and up-sell. Now, the specific simultaneous purchase, again, comes down to, hey, how much can we knock down all at the same time versus that roadmap conversation, and the follow-on sequential business that comes one behind the other.

We've received numerous inquiries from investors regarding how the supply chain disruption affects demand. We're seeing strong performance in Active WM. I'm interested in your thoughts on how this impacts the demand environment and whether there are other areas of the portfolio that might experience improved demand in 2022 and 2023. Thank you, Eddie.

I don't expect significant changes in 2022, Brian. The general supply chain disruptions are likely to persist, and I don’t foresee any substantial reassurances emerging this year. Building that strategy takes time. However, there is definitely high demand for capacity, particularly in digital transformation, as e-commerce continues to expand. There are still challenges and product shortages entering the country, leading to a pressing need to quickly distribute products to consumers once they arrive. Therefore, optimizing inventory deployment across the country is crucial. Additionally, while it may sound somewhat simplistic, supply chain flexibility and agility are extremely important globally.

Good color. Thanks, Eddie.

Pleasure, Brian.

Great. Hi, everyone. Maybe I'll start, Eddie in your prepared remarks, you mentioned how you saw growing addressable market opportunity. Can you maybe just expand on where some of the biggest new opportunities lie and maybe related to that, it definitely seems to be coming out more often Manhattan Active WM moving outside of that, most automated Level 4, Level 5 warehouse environment, how much is the persona of your customer starting to change? And so there's consequentially just more potential users of a cloud product, and that contributes to the TAM expansion.

It's a modernization really of the supply chain versus going down market a ton, Joe, to be perfectly honest with you, that's driving a lot of the demand. As we've talked about, a number of times, distribution centers today look quite different to the way they looked even five years ago, but certainly 10 and 15 years ago with the levels of automation, robotics, and so forth. So the need to have sophisticated software to be able to drive that inside the full walls transformation is important. Obviously, the digital transformation of the way consumers are ordering and consuming goods requires a whole different strategy for distribution, whether it be the number of distribution centers, the size of the distribution centers, the hours of operation of those distribution centers, all of those things contribute to the modernization of sophisticated distribution networks. In terms of growing addressable market certainly with continuing to expand our product portfolio, particularly out on the front end into the retail store portfolio, and we feel like we're doing pretty well from a market share perspective. Again, we've talked about this before with manufacturers and wholesalers becoming much more direct-to-consumer, that drives greater demand for sophisticated fulfillment and distribution. I was talking to one of our customers the other day and just sort of mentioned it, hey, we really consider ourselves a cloud-first company now, and this was a company that had been a traditional wholesaler for 30 years. And they said funny you should say that, we now consider ourselves a direct-to-consumer company. And they have been traditionally a wholesale for 30 years, and so a great marriage there and just a lot of great market expansion opportunities for us.

Okay. That's great. In terms of focusing on cross-sales and allocating more resources, can you elaborate on what that would mean for WMS combined with TMS? Does this also encompass aspects within WMS functionality, such as execution, control, yard management, and labor management? When you integrate all those capabilities with what Manhattan can offer, are you seeing your annual contract values increase specifically within the WMS category?

We've definitely observed significant synergy among those products. As you consider the Manhattan Active Omni point-of-sale, it's become much more advanced when integrated with WMS, particularly with features like late-stage cancellations, order consolidations, and aggregations. Regarding ACV growth or NACV growth, it ultimately depends on whether customers are making a roadmap purchase or opting for a multi-product buy upfront. This again relates to how much our customers can handle in terms of project initiatives simultaneously. We haven't yet seen this translate into substantial ACV growth with initial contracts, but that's acceptable to us. We're focused on the long-term success of our customers and aim to ensure they implement changes at a pace that is both ambitious and comfortable for them.

Okay. Great. Thank you very much.

Pleasure, Joe. Thank you.

Hey, guys, I'll play my broken record here and again congratulate you on some great results. Eddie, I wanted to see if you might pull the curtain back a little bit on the new CMO that you brought in, and a few months ago I think it's been. And I'm just curious if there are any tangibles you might be able to share in terms of what your marketing or branding looks like this year relative to last and specifically across other product or geo, or perhaps using different types of ad mediums that would be helpful. Thanks.

So Addie is doing a fantastic job. We're thrilled to have her on the team, and not only did she do fantastic where she's integrating into the team wonderfully and really spreading her wings across product and across their geographies. I'm not going to put her on the spot with very specific marketing initiatives in her first 90 days here or so, or even in an interim. But I will tell you that she's got us and our company very focused on digital marketing. Number 1, number 2, we've said for a long time that we think we have some of the best-kept secrets on the planet. Well, here comes Addie with 90 days or so into the business, and she certainly concurs, now she's got under the hood a little bit and is focused on making sure that we don't have a lot of secrets, that we are loud and proud with our marketing strategies going into 2022. So you certainly should expect to see us again be a little more, frankly, in communicating some of the very innovative solutions that we have in our portfolio.

Got it. I suppose we're not expecting a Super Bowl ad this year though.

Well, you never know, don't get up and go to the restroom, Mark. You might...

Alright. That's good. I like that anticipation. Last question, and I might have missed it just a housekeeping on POS go-live. I know you've chatted about them in the past, but just curious how that has trended.

Yeah, it's gone pretty well, and what I said was that we've got a number that are underway and we expect by the end of the year to light up a bunch more stores both here in the U.S. and some internationally as well. So the pipeline continues to grow; there clearly is demand out there for a really integrated, strategic suite of selling products across bricks-and-mortar and in digital. And as we get more established in this world and in this market, you're going to see us start talk about some really nice brands that are starting to adopt a solution.

Got it. Thanks, guys.

Our pleasure, Mark. Thank you.

Hi, nice job on the quarter and thanks for taking my question.

Sure thing, Mark, thank you.

Hey, Eddie, just starting with you. A question on your point-of-sale business, just building off the former question here. In over the past year or so the focus was basically just building up reference accounts with respect to that product. Now that you have many of those reference accounts in place, I'm wondering if you would expect point-of-sale to become a greater percentage of your business going forward.

It's a gradual process, Mark. We don't suddenly decide to make changes; it's central to our retail operations. These decisions about point-of-sale systems are made thoughtfully. I can say that we're noticing an increase in momentum across our organization, from initial opportunities to quick deployments and launches. It will be up to you to determine how significant this will be for our business in the next eight to ten quarters, but the growth is definitely encouraging.

Nice. Thanks. And then regarding just supply chain in general, given the increasing attention that companies are placing on supply chain these days, how much are you seeing higher-level executives involved in your sales processes and say, six, three or four years ago?

Yeah, much more so. I think we've always been mission-critical solutions to our customers since day one of the company's existence, but never more than in the last year or two have we been participating in forward-level and C-suite level conversations. I don't think there's barely a company on the planet that isn't very focused on supply chain issues, whether manufacturer, wholesale, or retailer, and we really are becoming one of the most important IT systems in our customers’ landscape for sure.

Okay, that's helpful. And then just finally here, I was wondering if you could just comment a little bit on what you're seeing or whether you're seeing any changes with respect to your customers' budgeting cycles for the upcoming year?

No. It's a pretty simple answer to that, Mark. No real change in budget cycles that we've seen.

We like simple answers; appreciate it. Thanks, that's all I have.

Sure thing, Mark. Thank you.

Hey, guys. I wanted to ask on the labor side of things and obviously you ramped up some compensation to retain and presumably attract employees. On the services side, have you been able to hire a plan, and has labor been a bottleneck there at all? And then within your customers, has their ability to engage with you been any limiter to getting deals implemented?

We've had to plan, so that's been beneficial. So far this year, we've added around 75 to 100 new associates, which is certainly exciting. Regarding our customers' hesitation to move forward due to resource constraints on their end, I haven't observed much of that. They have requested that we take on a bit more work, and we are seeing very strong participation from system integrators. Additionally, we are being asked to introduce our system integration partners to support our customer teams, but I wouldn't say we've experienced any hesitation or delays in purchasing due to lack of resources on the customer's part.

Great. And then in terms of existing WM customers moving from an on-prem deployment to the Cloud, maybe just some update there and what the interest level is. And I think if I recall when you released Active WM back in 2020, the original plan was to support the on-prem version for five years, so presumably we're a bit over three years out now from when that would end. How are customer discussions with customers progressing around moving over to the Cloud from existing deployments?

We have a lot of enthusiasm; we just said we got about 60 different customers under contract now. I may not be exactly correct percentage-wise, but it's about 50-50. Fifty percent of those 60 are brand new customers that we've never done business with before, and 50% are existing customers that are transitioning from on-prem into the cloud. So it's a pretty exciting time; we're very pleased about where we are. Obviously, we were very pleased with the financial results, but at the end of the day, we've only transitioned 30 of our existing customers that we built up over the last 30 years so far. We're encouraged by the enthusiasm there and their desire to move to scalable, extensible, visionless software in the cloud.

Okay, great. I appreciate it, guys.

Sure thing, Matt.

At this time, there are no further questions; I will now turn the floor back to management for any additional or closing remarks.

Yeah, good. Thank you, Angie. No real closing remarks. Just would like to thank everybody for all of their support during 2021. We're thrilled to have started with 2022 and look forward to giving you our first 2022 update in about 90 days or so. In the meantime, have a great evening. Thank you. Bye.

Thank you for participating in today's conference call. You may now disconnect your lines at this time.